China must spend $421b more to do fair share on climate: Report

China must spend $421b more to do fair share on climate: Report

BEIJING - China must increase spending on emission cuts and clean technologies by 2 trillion yuan (S$421 billion) to do its fair share to halt climate change, a report by Beijing's Central University of Finance and Economics said.

It urged the government to raise money from carbon markets to fund investments.

The report's conclusion contrasted with China's official policy that the main responsibility for ramping up action against climate change rests with developed nations.

China, the world's biggest-emitting nation, has already pledged to spend 520 billion yuan to help prevent global temperatures from rising more than 2C, according to Chen Bo, co-author of the report.

But that is only a fifth of what is needed if China - trailing only the United States on the list of history's biggest carbon emitters - is to shoulder a proportionate burden in global efforts to stop climate change, the report said.

The main responsibility for ratcheting up the extra funds should fall on the government, it said. "Public funding is essential to address climate change problems, and without a clear signal on CO2 emissions, mitigation projects are not financially attractive to investors," said the report.

It called on the government to use carbon markets to auction CO2 permits to help raise climate revenue.

Over the past seven months, five regional pilot trading schemes have launched in China, with plans to roll out a national market later in the decade.

One of those markets, southern Guangdong, auctions 29 million permits annually to participating firms, but the revenue is not earmarked for climate change spending.

The report, which has been submitted to the State Council, China's cabinet, said the state-owned China Development Bank should set up a green investment department to stimulate private and public investment in climate-related projects.

It further urged the financial market to develop products and mechanisms to draw further funds.